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It’s a story of gambling, experimentation and repeated failure, but Little Betsis not a cautionary tale. Peter Sims interviewed more than 200 leaders in innovation to compile a thoughtful, compelling look at the creative process as a model for success. So, what can your old-school company learn from the founders of Twitter and comedian Chris Rock? Sims gives us the details.

I co-authored a book called True North: Discover Your Authentic Leadership. I was out talking with managers and entrepreneurs and leaders and around the same time had come into contact with the school of design at Stanford. Design thinking is what Apple uses to develop its ideas. Things like prototyping, experimentation, thinking about using constraints, evolving ideas through process and developing them from scratch.

I had never been exposed to these methods all through graduate school, and so that’s when I started looking more deeply into this area and doing all the various forms of research, which included reaching out to people who were comedians, like Chris Rock, or people in the military who had to think quickly in the unknown. It was surprising to see how similar their approaches were. And yet they never talk with one another. So I thought, "Well that’s a really important story to be told, because we really need to change the way we think." We’re taught this very linear, logical, analytical approach to the world—and yet most times, we encounter problems that aren’t known, or we have to do something new, and in those situations, we really need to be able to use little bets to discover new possibilities and develop ideas using this more creative approach.

Of the companies you studied, which inspired you the most?

Pixar is amazing in that it makes little bets more than any other company I’ve been exposed to. It made a lot of little bets to become a film company starting with short films that they kept using to learn how to make movies, whether it was on the technical side or the storytelling side. So it took Pixar ten years of little bets before they were ready to make a major film, Toy Story. But they continue to make little bets every day. It’s just a part and parcel of their culture.

I think Amazon is the same way. When you speak with people who work with Amazon, they say that a big part of the culture of Amazon is experimentation. It just shows over time in these companies’ abilities to grow into new areas, to reinvent, to keep learning as a culture.

How can other companies create a culture of creativity?

Companies don’t innovate—people do. Anyone can make a little bet. People at Proctor & Gamble, instead of polishing their ideas for new products, will put together things with cardboard and duct tape and show those to potential users to get their feedback before they’ve invested too much time or emotional effort in producing something. They find that people will provide them with much better feedback as a result. They are, in a sense, failing quickly to learn fast. Anybody can make a prototype. Anybody can use a constraint and say, "OK, I’m going to give myself a week to work on this project."

Twitter was started by Jack Dorsey. He was an engineer at a podcasting company that was going nowhere called Odeo. And so, the founder of Odeo, Evan Williams, asked employees, "Hey, what can we do that’s new?" And Jack said, "I have this idea for short messaging technology." And Williams said, "Great, take two weeks, work on a prototype, and let’s see where things stand." After two weeks, Jack shared the prototype with the employees at Odeo and everybody loved it, so he got another six months to work on it. Then, before you know it, Twitter was born. And it became the company. Odeo dissolved and Twitter took off.

It’s the mentality that these small bets can empower anyone in an organization at any level to just try something new. It can be an approach to a meeting. If you’re a manager, you can test out one of your employees in a new role for a week to see what works. That’s what I think Pixar does. People work on short films before they do any full-length feature work. I hope it’s an empowering concept for people and companies.

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